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107 STAT. 578 PUBLIC LAW 103-66—AUG. 10, 1993 42 u s e 1395yy note. 42 u s e 1395yy note. 42 u s e 1395yy note. sum of any of the hospital's applicable reductions under subclause (V) for previous fiscal ^ears; and "(11) the 'applicable reduction' with respect to a hospital for a fiscal year is the lesser of 1 percentage point or the percentage point difference between 10 percent and the hos- pital's update a(^ustment percentage for the fiscal year.", (b) EFFECT OF PAYMENT REDUCTION ON EXCEPTIONS AND ADJUSTMENTS.-^Section 1886(bX4XA) (42 U.S.C. 1395ww(bX4XA)) is amended— (1) by inserting "(i)" after ''(A)", and (2) by adding at the end the following: **(ii) The payment reductions under paragraph (3XBXiiXV) shall not be considered by the Secretary in making a<$ustments pursuant to clause (i).". SEC. 13503. REDUCTIONS IN PAYMENTS FOR SKILLED NURSING FACILnY SERVICES. (a) PAYMENTS BASED ON COST LIMITS.— (1) No CHANGES IN COST LIMITS.—The Secretary of Health and Human Services may not provide for any change in the limits on per diem routine service costs for extended care serv- ices under section 1888 of the Social Security Act for cost reporting periods beginning during fiscal years 1994 and 1995, except as mav be necessary to take into account the amend- ments made by paragraph (3XA). The effect of the preceding sentence shall not be considered by the Secretary in making adjustments pursuant to section 1888(c) of such Act to the payment limits for such services during such fiscal years. (2) DELAY IN UPDATES.—The last sentence of section 1888(a) (42 U.S.C. 1395yy(a)) is amended by inserting after "October 1,1992" the following:", on or after October 1,1995,". (3) REPEAL OF EXCESS OVERHEAD ALLOCATIONS FOR HOS- PITAL-BASED FACILITIES.— (A) IN GENERAL.—Section 1888(b) (42 U.S.C. 1395yy(b)) is amended— (i) by striking ''shall recognize" and inserting "may not recognize"; and (ii) by striking "(as determined by" and all that follows and inserting a period. (B) EFFECTIVE DATE.—^The amendments made by subparagraph (A) shall apply to cost reporting periods beginning on or after October 1,1993. (b) PAYMENTS DETERMINED ON PROSPECTIVE BASIS.—The Sec- retary of Health and Human Services may not change the amount of any prospective payment paid to a skilled nursing facility under section 1888(d) of the Social Security Act for services fiumished during cost reporting periods beginning during fiscal years 1994 and 1995, except as may be necessary to take into account the amendment made by subsection (cXlXA). (c) EUMINATION OF RETURN ON EQUITY FOR PROPRIETARY SKILLED NURSING FACILITIES.— (1) REPEAL OF REQUIREMENT FOR RETURN ON EQUITY.— (A) Section 1861(vXlXB) (42 U.S.C. 1395x(vXlXB)) is amended to read as follows: "(B) In the case of extended care services, the regulations under subparagraph (A) shall not include provision for specific recognition of a return on equity capital.".